World Economy

/// /// Oil prices fell more than 1 percent on Monday, retreating from the sharp rally of the previous session, on the impact of a strong dollar and worries of stubbornly high supplies as OPEC prepared to meet this week to stick to production targets. The Organization of the Petroleum Exporting Countries pumped at a two-and-a-half year high of 31.22 million barrels of oil per day (bpd) in May, a Reuters monthly survey showed. [OPEC/O] The boost from OPEC puts output further above its target of 30 million bpd, underlining the focus of top exporter Saudi Arabia and other key members on market share. The group meets on Friday and is expected to maintain its current production policy, keeping the world oil market amply supplied for the foreseeable future. "OPEC continues to produce well above target, and also well above demand for its oil," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt. Brent crude oil futures LCOc1, fell $1

Ben Bernanke, former Federal Reserve chief, prompted the ‘taper tantrum’ when he hinted at reducing bond purchases // A paradox has emerged in the financial markets of the advanced economies since the 2008 global financial crisis. Unconventional monetary policies have created a massive overhang of liquidity. But a series of recent shocks suggests that macro liquidity has become linked with severe market illiquidity . Policy interest rates are near zero (and sometimes below it) in most advanced economies, and the monetary base (money created by central banks in the form of cash and liquid commercial-bank reserves) has soared – doubling, tripling, and, in the US, quadrupling relative to the pre-crisis period. This has kept short- and long-term interest rates low (and even negative in some cases, such as Europe and Japan), reduced the volatility of bond markets, and lifted many asset prices (including equities, real estate, and fixed-income private- and public-sector bonds). And

Figure 1. World oil (crude and condensate) average daily production and refiners average acquisition cost in 2009 $, both based on EIA data. 2010 is partial year through September 30. ///     /// /// . Figure 2. Graph of Persian Gulf oil (crude and condensate) based on EIA data. /// . Figure 3. Persian Gulf oil production and average price, based on EIA data. /// . Figure 4. OPEC reserves based on BP Statistical Report data. Graph by Rune Likvern of The Oil Drum. /// : Figure 5. Oil production from the Former Soviet Union, based on EIA data (crude and condensate). /// The USA: Figure 6. US (crude and condensate) oil production, based on EIA data. /// : Figure 8. Oil production (crude and condensate) for the rest of the world based on EIA data. /// International   International energy data and analysis /// International Energy Outlook 2014 /// World markets for petroleum and other liquid fuels have entered a period of dynam